For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Thursday, 20 March 2008

Firing blanks: Lithuanian importers are forced to pay

The IPKat's Lithuanian friend Andrius writes to inform him that the Supreme Court of Lithuania has heard a case involving the private copying levy (also known as the blank media tax or levy) as a way of compensation to authors for the exceptions to copyright provided under the Lithuanian Copyright Law and Article 5(2)(b) of the EU Copyright Directive.

Right: resourceful Lithuanian litigants demonstrate an infallible way of stopping judges falling asleep in appellate courts

Says Andrius:

"The claimant - the Lithuanian collecting society (which also collects and distributes the private copying levy in Lithuania - sued a private company for refusing to pay the levy. The defendant argued that

(i) While the Lithuanian Copyright Law imposed the obligation to pay the levy on importers of blank media, since the defendant was importing the unlevied goods from other EU Member States within the single market, that did not amount to importation;

(ii) since the levy might have been paid in another Member State, paying it again in Lithuania would contradict the purpose of the Directive;

(iii) it was shown before the court that the media in question was sold not for private but for professional purposes and was not therefore used for private copying.

The case climbed the court ladder and finally reached the Supreme Court of Lithuania, which held for the claimant. It stated that, in the light of the Directive, the definition of importer should be understood as having a wider meaning than in customs-related matters. Narrowing the definition of the importer and
imposing the private copying levy only on media that were imported from third
countries would be contrary to the spirit of the Directive (note that Lithuanian courts are reluctant to refer to any spirits of any directives), the Court said. It continued that the Directive explicitly provides for the fair compensation to the rightholders if the private copying exception is applied.

As to "double taxation" argument, the Court emphasized that exporters are entitled to retrieve the paid levy when blank media are exported from the country. This, in Court's opinion, makes the argument essentially null and void.

The third argument was dismissed, to my point of view, leaving "the spirit of the Directive" aside. While acknowledging the possibility of proving the contrary, the Court held that the private copying purpose is presumed and this presumption was not rebutted by the defendant. The Court did not explained how it should be done and what evidence is required.

This decision ended the long-landing litigation and cleared the way for the collecting society to claim levies from all Lithuanian importers of blank media".

The IPKat thanks Andrius for telling him about this. Once again, whether one loves blank media levies and thinks they're cool or detests them like the plague, it cannot be in the best interests of creators, performers, the recording industry, manufacturers of the relevant hardware or indeed importers to have to waste money on a country-by-country basis around the European Union when the issues are simple to resolve in principle and could have been resolved by a couple of paragraphs of well-drafted law in an appropriate directive. That way, collecting societies wouldn't be spending on legal fees the sums which could be put to better effect if paid to their members. He also asks, does anyone have handy figures concerning the annual legal spend of Europe's many and varied collecting societies when they're trying to establish matters of clear legal and commercial principle, rather than chasing down the usual non-payers?

Merpel says, given Lithuania's horrific record (sic) in the Eurovision Song Contest, I assumed that blank media probably cost more than the recorded stuff.

Lithuania as an originator of recorded music: a story of shame here and indeed here
Lithuania's musical pride here

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